Latest news with #retirementplanning
Reuters
4 hours ago
- Business
- Reuters
Ty J. Young Wealth Management Investor's Guide Video Offers Confidence Amidst Economic Volatility
ATLANTA, GA, May 31, 2025 (EZ Newswire) -- Amidst persistent inflation and high interest rates, Ty J. Young Wealth Management, opens new tab's Investor's Guide video has become a highly downloaded resource for retirement planning. The guide walks investors through navigating the complexities of retirement investing in the current economic climate and solutions for mitigating volatility. Ty J. Young Wealth Management curated the video guide in response to ubiquitous concerns from investors across the country about market volatility and risks to retirement portfolios. "Our goal is to provide investors with more than just information; we want to deliver clarity and confidence,' says Ty Young, CEO of Ty J. Young Wealth Management. The Ty J. Young Wealth Management Investors Guide is available for free at: opens new tab. About Ty J. Young Wealth Management Established in 1998, Ty J. Young Wealth Management is a leading independent wealth management firm committed to providing comprehensive financial solutions. With over $1 billion in assets under management and serving more than 7,000 clients across the nation, the firm is renowned for its expertise in investment management, retirement planning, and insurance. Ty Young and the firm's strategists are frequently sought after for their insights, appearing in prominent media outlets such as CNBC, Forbes, and Fox Business. Discover how Ty J. Young Wealth Management can help you achieve your financial goals at: Media Contact Richard Lorenzenrlorenzen@ ### SOURCE: Ty J. Young Wealth Management Copyright 2025 EZ Newswire See release on EZ Newswire
Yahoo
13 hours ago
- Business
- Yahoo
$85,000 Investment Mistake? Suze Orman Says This Listener Should Exit Her Annuity ASAP
When listener Portia asked a question on the "Women & Money" podcast about her variable annuity, Suze Orman didn't hold back. Based on the high fees Portia was paying and the surrender schedule she faced, Orman advised her to cut her losses — and fast. If you've ever wondered whether an annuity is right for your retirement funds, especially when it involves rolling over a 401(k), this is a story worth paying attention to. Portia explained that she transferred $85,000 from her previous employer's 401(k) into a variable annuity at Fidelity in 2022. She's currently paying around $380 per quarter in fees — more than $1,500 per year — and the annuity has a nine-year surrender period. If she waits it out, she avoids the surrender charge but continues paying hefty fees. If she exits now, she'll face a penalty of roughly 7%. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Hasbro, MGM, and Skechers trust this AI marketing firm — Orman did the math. If Portia sticks with the annuity until the ninth year, she'll end up paying approximately $9,120 in fees. In contrast, her surrender charge today would be around $6,300 to $6,900. 'Absolutely surrender it," Orman said. "It makes no sense for you to be in it." Orman has long warned against putting retirement savings into variable annuities, especially when they come from qualified accounts like a 401(k). In Portia's case, the high annual fees alone are reason enough to reconsider. According to Investopedia, variable annuities often charge 2% to 3% annually just for management and administrative costs. Add in surrender charges, possible sales commissions, and insurance fees, and you're looking at a serious drain on your retirement savings over time. Even though annuities offer the benefit of guaranteed income, that security comes at a price. "It makes no sense for you to be in it," Orman said. "You might even want to look at converting it little by little to a Roth IRA and really save money in the long run." Trending: Maximize saving for your retirement and cut down on taxes: . Rolling a 401(k) into an annuity can sound appealing — it promises stability and income in retirement. But the move can backfire if you're not fully informed. Here's why: No added tax benefit: A 401(k) is already tax-deferred, so moving it into an annuity doesn't give you extra tax savings. Limited flexibility: Annuities often lock you into fixed payment schedules, which can be a problem if your expenses vary month to month. Hefty fees: Fees can quietly eat away at your balance, reducing your future payouts. Inheritance issues: If you die prematurely, the remaining annuity funds may go to the insurance company — not your suggested that Portia surrender the annuity and reinvest the money in her IRA in a way that makes more financial sense. She also floated the idea of gradually converting the funds to a Roth IRA to reduce future tax burdens. If you're in a similar situation, consider seeking advice from a financial planner before making changes. Understanding your investment's fee structure, potential penalties, and tax implications is key to making the right decision. Read Next:'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article $85,000 Investment Mistake? Suze Orman Says This Listener Should Exit Her Annuity ASAP originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
a day ago
- Business
- Telegraph
Why it pays to diversify your investments beyond property
In the UK, people like to invest in what they can see – usually bricks and mortar – and judging by the property market over the last couple of decades, it's clear why. 'A whole generation of people have put money in their own homes, in rental properties, and by and large that's turned out well – prices have risen, properties earn an income and people feel good about it,' says Matt Conradi, deputy chief executive of wealth managers Netwealth. 'In the UK, we tend not to see property as a risk.' But when a new phase of life beckons, tax rules evolve and interest rates rise, having so much of your money in property can lose its appeal. 'If you are beginning to think about a stable income in retirement, gifting some wealth to the next generation, drawing down on capital, then exposure to just one asset class – UK residential property – doesn't give you much flexibility. All your eggs are in one basket,' he explains. Nor can you easily take out a little cash – as he puts it, 'you can't just sell a bathroom'. At this stage, it makes sense to diversify. 'Not only through different asset classes such as stocks and bonds but also diversification in its broadest sense,' he says. 'That means flexibility in how your money is packaged, how and when you can use it and how much you need to meet life goals. A fixed rental income can take you over tax thresholds and doesn't give much room for manoeuvre.' With a spread of assets, individuals can take advantage of market price fluctuations and tax rules to withdraw cash more efficiently. 'You don't want to take money out when the market is 20 per cent down – it's much harder to recover. So you diversify to minimise the risk.' Property can also be inconvenient, especially for owners on the brink of lifestyle changes. 'They might be poised to travel – they don't want someone calling at 7pm to say the boiler is broken. They don't want the hassle,' he says. That's where the Netwealth team comes in – helping clients understand how to spread risk and plan around key milestones, from paying off a mortgage to gifting wealth or fixing a date for retirement. Using a blend of expert advice, innovative technology that shows exactly where money is invested, along with tools to model future outcomes, Netwealth supports clients at every stage. The firm also stands out for its low fees – often as low as 0.35 per cent – thanks to its use of low-cost passive funds and efficient digital tools. They'll also help clients make the most of Isas and pensions, and adapt to changing legislation, such as the proposed changes to inheritance tax changes that are due in 2027. 'Although you should never take any decision for tax reasons alone. It must fit with your goals,' he says. 'Expert advice and investment management combined with the latest technology – with much lower fees – help individuals to see how their own investments will fare in different scenarios and reveal trends to build long-term wealth preservation through excellent investment management,' he says. Lower fees can save life-changing sums – tens of thousands of pounds over time, he adds. 'Many people haven't dealt with wealth managers before and might be sceptical about charges – ours are low and our technology offers transparency.' After a lifetime of careful saving, some find it difficult to shift gears: to balance their portfolio, start spending or support their family. Personal finance projections can offer clarity and confidence, showing whether goals are achievable or if wealth could be passed on more efficiently. Others may feel uncertain about market risk, which is why Netwealth offers flexible levels of support, including regular check-ins. 'We don't say, 'Come to us we'll be up 5 per cent when markets are down.' Returns accrue over time and there will be ups and downs,' he explains. 'We can't predict markets or inflation – those are outside our control. But we focus on what we can manage: smart diversification, efficient tax use, paying lower fees and thoughtful planning. that will be how you get the benefit of better returns over time.' Find out more at When investing, your capital is at risk Netwealth Investments Limited is authorised and regulated by the Financial Conduct Authority, with firm reference no. 706988. Registered in England and Wales, with company no. 09493628 and with registered offices at The Bloomsbury Building, 10 Bloomsbury Way, London, WC1A 2SL.
Forbes
a day ago
- Business
- Forbes
Can You Raise a Family Without Sacrificing Retirement?
Navigating retirement planning has many different avenues. One path with many unknowns is the path that includes raising a family. With the added complexity of raising children many unexpected costs arise. Medical and educational expenses easily top some of the most expensive costs a parent or guardian may face. Neither is something to ignore and costs differ greatly between individuals. Depending on the size of the family and living conditions, the cost of housing, grocery expenses, clothing and general day to day costs may increase significantly. The drain on income piles up rather quickly and sometimes, it seems, without an end in sight. Add in the cost of saving for retirement and this becomes a daunting task. Balancing Parenthood and Retirement A middle class family can expect to spend over $300,000 to raise one child to age 18. When considering the cost of raising one child, let alone multiple, foregoing retirement plan contributions seems like the quick and easy solution. In fact, this is in direct contrast with the correct path to take. When considering the financial standpoint of the parent's retirement account, continuing to contribute is paramount. If the individual does not continue to contribute, the value of time invested in the market is lost, dollar cost averaging loses its benefit, and any employer match offered is left on the table to name a few negative affects this has. These valuable tools remain unused, and the balance of the retirement plan suffers greatly. Moving beyond the initial cost of raising a child, higher education costs typically come prior to the parent/guardian retiring. With this timeline, one may consider this a more urgent cost than saving for retirement. Often the parent may stop contributing to pay for higher education or even take a loan or withdrawal from the accounts. This can be detrimental to the health of the retirement plan. Reducing the amount of contribution loses the benefit of compounding returns; the loan amount is no longer invested and must be paid back. If not paid back, the withdrawal may have high tax consequences. Keep in mind the child has time on his/her side to pay for the loan, save for retirement and enjoy an overall prosperous life, while the parent will run out of time much sooner to pay for retirement. Once retired, income mainly ceases and so does the ability to add funding to retirement accounts. If the loan is not paid, typically it will be considered a distribution. The child's education may be paid for but the parent is left eating peanut butter and jelly sandwiches and not by choice. Consider the benefit of having a child work. The child can help to pay for extracurricular activities or general spending money. This teaches the child important money management skills necessary for later in life. Simple tasks like walking the dog or mowing the lawn that a person may pay a company to do can become the child's task. This helps develop not only self confidence in the child, but can potentially teach entrepreneurial skills. Careful budgeting and small sacrifices coupled with ongoing savings for both retirement and potential higher education costs as early as possible will have a snowball effect on long term goals. Deviating from constant retirement savings will easily derail the happy and comfortable golden years so many people look forward to. As always, it is important to consult a tax or investment professional before making these important decisions.
Daily Mail
2 days ago
- Business
- Daily Mail
Warning over pension clawback - could it hit YOU at state pension age?
'Pension clawback' means your final salary pension might be cut when you reach state pension age. The reason for this originates in rather arcane arrangements dating back to the dawn of the welfare state in the 1940s - and many pension schemes have since changed their rules or phased out the practice. But if you are due a final salary pension via a current or old employer it is worth paying close attention to all information on the paperwork you are sent - and any choices you are being asked to make – especially in the run-up to retirement. If you discover your scheme operates 'clawback' it's most important to fully grasp the rules, particularly if you retire before 66 and so will see a drop in your work pension after you start receiving your state pension. Be prepared in advance, and ask questions of your scheme about the impact on you personally, to avoid any nasty shocks to your budget later in retirement. Clawback has become controversial over the years, as we will explain below, because people are understandably exercised by a sudden loss of income when they don't expect it or haven't had an explanation. Here's what you need to know about pension clawback... What is 'pension clawback' and how does it work? Pension schemes use different names for this and it's worth knowing the financial jargon. In addition to clawback, you might hear references to integrated pensions, state pension offsets and bridging pensions. Arrangements for 'integrating' work and state pensions began back when the modern welfare state was created, which led to more people paying National Insurance from 1948. Final salary (also known as defined benefit) pension schemes, both private and public, wanted to take account of more staff now receiving a state pension. They sought to prevent schemes themselves or individual members overpaying contributions or doing so unnecessarily, just to duplicate benefits. The rules for doing this and the calculations involved varied, and changed over time (if you're interested in the history, the House of Commons Library published a briefing on pension clawback in 2020). Nowadays, most private sector final salary pension schemes are no longer linked to state pensions. Public sector pension schemes stopped taking them into account decades ago, except for service before 1980. But some work schemes are still designed around them, and the result is that payments may be cut when a member reaches state pension age, to adjust for lower contributions made earlier by the scheme itself and its members. The size of the reduction depends on the scheme, but it is a fixed amount and usually works out at a few thousands of pounds a year. This has a bigger impact on someone with a small pension than a larger one. Clawback is sometimes embedded in a scheme's rules and will kick in automatically. However, some schemes offer workers the option of taking a higher 'bridging' pension - just until they reach state pension age - or a lower 'level' one. They work out the cost to end up being the same either way, but people who get the choice can find it convenient to have a temporarily higher income while they wait to get a state pension. This is why you should read pension documents carefully in the run-up to retirement, so you know where you stand if you are affected by clawback (or a myriad other important matters). If you are not sure, or don't understand the information you are sent, ring up or email your scheme and ask if it is has clawback arrangements. Staff should be prepared to take the time to answer and explain any impact on you individually - better now than when you reach state pension age and are surprised by a sudden cut in your work pension. Controversy over pension clawback If you do not know beforehand that clawback is going to reduce your work pension when you reach state pension age, you will understandably feel aggrieved - and it causes hardship in some cases. Clawback was condemned by some MPs as outdated and punitive during an adjournment debate in the House of Commons in April. Several cited constituents who had seen cuts of several thousand pounds, amounting in some cases to 13 per cent or 16 per cent of a pension, and there were calls for abolition of clawback. Criticism was aimed in particular at a Midland Bank pension scheme, now run by HSBC, which is opposed by the Midland Clawback Campaign and the union Unite. See the box below for HSBC's stance on clawback. Those against clawback often point out that it is regressive, in that fixed reductions disproportionately affect people with smaller pensions, who are often women. What does HSBC say about clawback? HSBC's position on [an amendment to] the state deduction has been consistent; it would constitute a retrospective change to the scheme that would benefit a particular group of members and would be unfair to other scheme members. It would increase the risk of grievances being raised by other pension scheme members both in the UK and globally and would set a precedent for further challenges to pre-existing valid terms and conditions that could lead to significant unplanned and unintended costs. Pension firm PensionBee says: 'As pension clawback is a fixed cash amount deducted from your pension - unlike other charges which usually deduct a percentage of the pot - its impact on your pension can vary. 'Those with larger pensions will be less affected, whilst smaller pots can see a substantial loss.' It offers the following example: 'If you received £50,000 a year from your workplace pension scheme, then a fixed pension clawback of £2,500 a year would equal a 5 per cent deduction every year. 'However, if you received £10,000 a year from your workplace pension scheme, then that same fixed £2,500 clawback would equal a 25 per cent cut to your annual pension income.' On its website, PensionBee says: 'Whilst most schemes have capped or withdrawn clawback, it's worth checking if you could lose out on a chunk of your pension. 'Those most affected are the lowest income workers, often women, and those seeking to retire early. 'If you're enrolled in a pension clawback scheme, it's likely you aren't even aware yet. One of the issues is poor communication, with few people affected aware of its importance.' PensionBee suggests asking your workplace pension scheme directly or checking your company handbook, and considering making additional contributions to offset the future loss from pension clawback. Will the Government abolish clawback? Successive governments have declined to force pension schemes to end clawback arrangements. The Conservative former Pensions Minister Guy Opperman said in 2017: 'These schemes were designed to avoid additional contributions from sponsors and members by taking account of some or all of the state pension when calculating the amount of occupational pension payable. 'The arrangement is set out in scheme rules which would have been available to members when they joined the scheme. 'Such arrangements are not a requirement of Department for Work and Pensions legislation. It would not be right to compel schemes to withdraw this integration arrangement. 'That would amount to a retrospective change imposing significant additional unplanned costs. Pension scheme rules on the calculation of benefits are many and varied, and must remain a matter for employers and scheme trustees to decide.' At the House of Commons debate on clawback in April, the current Labour Pensions Minister Torsten Bell gave a lengthy response which you can read here. He said: 'I appreciate that that type of scheme can be controversial, thanks to the change in the private pension income involved. 'All of us sympathise with anyone who expected a straightforward income increase when their state pension kicked in, only to find that things were much more complicated than that. I have read and listened to representations on this issue myself.' He went on: 'Integrating an occupational pension scheme with the state pension was a core design of some schemes, and that has pros and cons. 'It used to be a common feature of final salary schemes, covering almost half of schemes, according to one survey from the early 2000s, although it is far less common today.' Bell said all pension schemes are required by law to provide every member with basic information, either before they join or very shortly afterwards. If someone has not received clear communication they can complain via an internal dispute procedure, and after that to the Pensions Ombudsman. He added: 'I owe it to this House to be clear that we cannot retrospectively change the benefits schemes offered to their members. Any legislative change would affect all integrated schemes, risking the future of some that are less well funded.' What do other pension experts say about clawback? Rosie Hooper, chartered financial planner at Quilter Cheviot, has dealt with clients whose pensions are reduced by clawback. She says: 'Pension clawback often trips people up simply because they don't understand it, and they haven't factored it into their budget. 'The reality is that the reduction isn't usually huge, but it's the surprise element that causes issues.' Hooper says she always explains clearly what a client who is affected should expect. 'It's not that the whole state pension gets deducted which is a common misconception. It's about how some schemes reduce the income they pay once the state pension kicks in. It's not a hidden charge, but it needs to be properly understood.' She says starting to receive the state pension allows people to reduce the income they need to take from other sources, but the step-down in cash flow has to be planned for and built into a retirement plan. 'It's also worth remembering that the state pension used to make up a much bigger share of someone's retirement income,' she adds: 'Today, it's a smaller piece of the puzzle, which makes planning around it even more important.' Simon Taylor, head of defined benefit at pension consultancy Barnett Waddingham, says clawback was typically part of the design of defined benefit (final salary) pensions that remained 'contracted in' to paying second state pensions (Serps or S2P). 'The design meant that both the company and the members paid higher National Insurance, and members generally built up full state pensions,' he explains. People in pension schemes which 'contracted out' of paying more NI usually get lower state pensions. 'Clawback' is essentially a way to integrate the scheme benefit with the state benefit - if it didn't exist, pensions would have cost the company and member more,' says Taylor 'As a result, members would have had lower take-home pay over the course of a career.' He says there are lots of ways for clawback to happen, but obviously if it comes as a surprise it can be poorly received - and communications to scheme members weren't always as thorough as they are today. 'For people hitting state pension age now, it is all likely long-forgotten, and so can feel like a harsh practice,' he says. 'In reality though, the process has its roots in a sensible cost/benefit balance - and the alternative is being in a contracted-out scheme and paying lower National Insurance so getting a lower state pension, or being in a defined contribution scheme and likely receiving far less in the long run. 'Defined benefit pensions remain impressively generous - however, the responsibility sits with the scheme to ensure members understand the realities of their benefits and if and when any deductions will be made.'
